The Autumn statement is all about Brexit

Economically, the Autumn statement contains some important changes and information on projected future growth, but this is all predicated on Brexit, the one colossal story in British politics. The headline is that UK economy is forecast to be £122bn worse off by 2020 than previously predicted.

The blue bar is the extra borrowing due to Brexit.

Brexit will cost £58.7bn in extra borrowing

The early Christmas surprise from the OBR is that Brexit is so far projected to cost the UK some £58.7bn in extra borrowing over the next six years. That’s £188 million a week, enough for a new hospital wing, or just under a grand for every man, woman and child to buy themselves a virtual reality system or a high-end drone for Christmas.

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The personal allowance will rise, but some tax savings are being cut

Brexit means that both government debt and borrowing are being hiked, but the government is also increasing some stealthier ways of making money. Tax on insurance premiums is rising, and Hammond has stealthily removed the tax savings from some employee benefits in kind. This may mean more pressure on the NHS as employees opt out of pricier health insurance policies. The better news is that the government will raise the personal tax allowance to £12,500 by 2020 and that the higher tax band will rise to £50,000 by the end of the Parliament.

The Conservatives borrow Labour's letting agent fees policy

The government is implementing a policy Labour had called for by banning upfront fees charged by letting agents. To address the chronic housing undersupply, they’re also providing a £2.3bn housing fund to help provide 100,000 new homes in high-demand areas and £1.4bn for 40,000 more affordable homes.

No budget surplus until 2025

Philip Hammond is junking George Osborne’s financial targets, and the goal of a UK government surplus by 2020 has been torn up and replaced with a promise to get to a surplus some time before 2025. It is little wonder, looking at this Autumn statement, why Hammond has been criticised for being gloomy.

Brexit is eating our breakfast

The UK’s future doesn’t look disastrous, but it does look worse if we leave the EU. The great unknown about the UK’s economic future is still Brexit. When the Office for Budget Responsibility (OBR) asked the Government for more information about Brexit they were given short shrift. We can’t accurately account for the impact of Brexit on growth because the government merely pointed the OBR towards two speeches made by Theresa May, effectively stating that Brexit means Brexit.

“This leaves us little the wiser” the OBR said politely of the “considerable uncertainty” they now have about the future direction of the UK’s finances. OBR forecasting doesn’t account for any reduction in migration that might happen after Brexit, nor can it account for the outcome of the negotiations. This Autumn Statement is a first look at what has been called the "lose-lose" short term outcome of leaving the EU. The question is whether the majority of voters still see it as cheap at twice the price.

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Politically, the Autumn statement is irrelevant

With Labour so far behind in the polls, and the Conservatives wiping the floor with Jeremy Corbyn’s team when it comes to how they’re viewed on the economy, Philip Hammond could have made the speech naked, promising to murder the first child of all welfare recipients, and by the evening news John McDonnell would have found some way to come off second best.